Maruti Udyog Ltd (MUL), has indicated that a price hike to the tune of Rs 20,000 to Rs 25,000 is likely to take effect from January 3, 2000 but no firm announcement on the exact quantum of hike per model has been made yet. It remains to be seen if MUL will make the first move in line with its status of the market leader.

Daewoo Motors India Ltd (DMIL) officials have also been singing the price increase tune for some time now and the company, in fact, had sent an official press release quoting `sources' within the company of a possible Rs 25,000 hike very soon. For DMIL, pricing has always been an ordeal and Matiz sales are just showing signs of a sustained pick up in volumes. The company, obviously, does not want to upset the applecart.

Hyundai Motor India Ltd (HMIL) has stopped taking orders for Santro in the old price and is watching competition to make the announcement. Top company officials talk of a 5 per cent increase in price. HMIL must also factor in the pricing of Wagon R, MUL's new offering which will take on Santro.

A price band of Rs 3.80 lakh to Rs 4.10 lakh is being talked about. Industry sources expect HMIL to make the announcement after Maruti officially announces the price of Wagon R during its launch in Delhi on the Christmas day. Telco has also been making some noises about passing on the increased cost of inputs.

Most manufacturers are already taking a hit on their bottom lines but the fluid situation that existed a few months ago consequent to new entrants made it very difficult for them to effect the hike. In fact, MUL had to drop prices of all its models to maintain volumes.

The major causes for the increase are the diesel price increase which had a cascading effect on cost of inputs while also pushing up the cost of transportation. Steel prices have also began to move northwards thereby eating into the already thin margin.